Petrobras uncertainties lead Brazilian importers to bump oil purchases

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Amid turmoil between the federal government and Petrobras over rising fuel prices, Brazilian oil importers increased their foreign purchases of crude and derivatives in May.

Think tank Fundação Getulio Vargas says the bump explains Brazil’s smaller trade surplus last month. The country’s trade balance in May was a net USD 4.9 billion — a USD 3.6-billion drop from the same month last year. This decrease was due to an 8.1-percent drop in exports in the month and a 3.2-percent increase in imports.

The numbers for the first five months of the year also suffered a reduction: from USD 26.6 billion in 2021 to USD 25.4 billion in 2022. 

“Importers, fearing the international situation and the turmoil that has been occurring in the Brazilian oil market, may have anticipated their purchases,” the think tank argues.

The trade balance for oil and oil products has been shrinking the surplus in recent months, from a positive balance of USD 2.8 billion in February to just USD 88 million in May. That category accounted for a share of 13 percent in total exports and 15 percent in imports.

And this trend could extend to June. Since the end of May, when the government announced plans to remove José Mauro Coelho as Petrobras’s CEO, relations between the government and the oil and gas giant have become increasingly fraught. 

Tension has only grown since Friday, with Petrobras’ announcement of a new bump in gasoline and diesel prices. The measure culminated in the resignation of Mr. Coelho earlier this week and sparked discussions about changes in the legal framework of state-controlled companies and the creation of a hearings committee to investigate how the company sets fuel prices at its refineries.